Source Of Medium Term Funds

Almost most companies can not obtain funding sources without the use of collateral. For that, they must provide various guarantees to the donor. Medium term credit is a credit that uses a guarantee. The term medium term indicates that the credit uses the collateral. The term medium term is such a credit within a year or more. But generally less than 10 years. At that time there was no basis. So it’s possible that the reader encounters a different part of the time period. There are no definite restrictions between the types of business funding sources if divided over time. Short term, medium rate. Included in the group of medium term fund sources include leasing and credit money lender sg for a maximum of five years. Special medium-term financing is often a business choice of business, basically, globally there are several types of financing included in it. Among them is term loan. The term loan is usually given by moneylenders sg, insurance, and pensions, government funding agencies, and equipment suppliers. The amount of interest rate term loan determined several factors such as the general interest rate, the size of the loan, maturity, and the amount of debt that has been previously owned.

Another type of medium-term financing is equipment loan, which is used to finance the procurement of new equipment. Equipment loan is usually provided for easy equipment on sale and not specialized equipment. Equipment loan is usually provided by commercial banks, equipment vendors, insurance companies, pension funds and other financing institutions. There are instruments that can be used to finance this equipment, through a sales contract. Conditional and mortgage moving goods. If the company uses a conditional sale contract to finance the purchase of equipment, the seller will hold partially until the buyer repays the entire financing according to the contract. So when the equipment is sent the seller usually receives a down payment and the buyer is willing to pay periodically until the repayment expires, the seller will deliver the equipment retained or the letters of the equipment.

Medium-term financing is widely used by companies if they need funds. The variety and sources of financing are now increasing, although it is not clearly distinguished that the medium and ten-year term is the medium term and the rest is long term. The term loan is one of the types of medium-term financing issued by commercial banks, pension insurance, government funding agencies, and suppliers. The term loan has a lower cost than the issuance of bonds or shares, due to emission costs, registration and other costs in connection with the issuance of bonds or shares. In addition, not all companies have sufficient requirements to issue shares or bonds.

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